What Is Assemble-to-Order (ATO)?
Assemble-to-order (ATO) is a business production strategy where products that are ordered by customers are delivered rapidly and are customizable to a certain degree. It regularly expects that the essential parts of the product are as of now manufactured however not yet assembled. When an order is received, the parts are assembled rapidly and the end result is shipped off the customer.
Understanding Assemble-to-Order (ATO)
The assemble-to-order strategy is a hybrid between the make-to-stock strategy (MTS) and the make-to-order strategy (MTO). A make-to-stock strategy is one where products are completely delivered in advance. The thought is to build an inventory that matches expected or anticipated consumer demand. This method would comprise of setting a production level, building up inventory, and afterward endeavoring to sell however much assembled product as could reasonably be expected. It's utilized for the most part for high-volume goods, consumables, and things that can be bought in bulk or as a single unit.
A specially make strategy is one where products are manufactured once the order has been received. Production is driven by demand and things are possibly created when orders are confirmed. All in all, the supply chain operation doesn't start until there is evidence of adequate customer demand. This strategy is frequently employed for top of the line goods or things made separately or in small clusters.
The ATO strategy endeavors to join the benefits of both specially make and make-to-stock — getting products into customers' hands rapidly while allowing for the product to be adjusted or altered in some ways, according to customer request. Generally speaking, the time and costs associated with building the product from its parts are negligible. Be that as it may, the time and costs to build the parts, which are normally ordered from a provider, can be extensive.
Empowered by technology, advancements in production processes and inventory management systems have had a big impact in making assemble-to-order strategies a reality. Add less expensive methods of delivery products, and the strategy has been a boon for product customization opportunities.
Advantages and disadvantages Assemble-to-Order (ATO)
In the same way as other methods that chart a middle course, assemble-to-order enjoys the two benefits and hindrances.
Think about a manufacturer of personal PCs. It could have every one of the essential parts of a PC — motherboards, realistic cards, processors, monitors, consoles — in stock and as of now manufactured. The company relies upon different providers for these parts.
At the point when orders for new PCs show up, it is simple for the company to assemble and customize the PCs utilizing the different parts. The cycle is driven by customer demand, notwithstanding, and until the order shows up, the parts sit on racks.
- Assemble-to-order is a combination of specially make and make-to-stock.
- A PC-producer that gets orders and afterward assembles customizable PCs utilizing parts like consoles, monitors, and motherboards is utilizing an assemble-to-order strategy.
- Assemble-to-order (ATO) is a business strategy where products are immediately created from part parts once the order is confirmed.
- In a run of the mill ATO approach, the costs of gathering the product from its parts are irrelevant, however the costs of creating the various parts can be substantial.